Getting Credit in Myanmar

YANGON, Myanmar–Foreign visitors to Myanmar may finally be able to start ridding their wallets of hundreds of dollars in cash in favor of plastic credit cards, as the nascent economy celebrated its first-ever point-of-sale transaction in Yangon on Thursday.

Credit card giant Visa Inc., which in December established ATM networks with selected Myanmar banks, announced its first credit-card payment at the Green Elephant Restaurant in Yangon. The restaurant will be the first of several local merchants that will start accepting Visa credit-card transactions in coming months.

The transaction was done through a Myanmar Oriental Bank Visa-branded credit card, using an electronically operated, wireless point-of-sale terminal. Until now, that had never been seen in the country, owing to harsh sanctions that prevented U.S.-based financial services from setting up shop in the country.

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Foreign visitors with Visa credit, debit and prepaid cards will be able to now use these cards to pay at selected merchants through these terminals, an important step towards the inclusion of the once-isolated country in the world’s financial ecosystem.

“The ability to accept electronic payments at premises [of local merchants] will open up many new opportunities for merchants to grow their businesses,” said Somboon Krobteeranon, Visa’s country manager for Myanmar and Thailand.

At the Green Elephant Restaurant, for example, owner Cherie Aung-Khin distributes locally made handicraft and furniture, inaccessible to willing foreign buyers who don’t have the required amounts of cash in their wallets.

Visa’s first point-of-sale transaction – paired with banners indicating that Visa cards are the credit card of choice at Green Elephant Restaurant – underscored a rush for financial-services companies to stake their claim on the burgeoning market ahead of the competition. Visitors landing at Yangon’s International Airport, for example, would notice giant signs advertising Mastercard Inc.’s credit cards as the preferred card of choice in the country.

Both credit-card issuers have since last year established partnerships with local banks – including Co-operative Bank Ltd., better known as CB Bank, Myanmar Oriental Bank and Kanbawza Bank Ltd. – enabling their ubiquitous credit cards to be accepted at the growing number of ATMs cropping up nationwide.

Teething problems have remained, though, mostly owing to poor infrastructure and unreliable electricity even in Myanmar’s biggest and most developed cities. Earlier this year, some foreign tourists complained that their Visa cards couldn’t work on ATM machines, due to spotty electricity connection required to connect those cards back to a user’s home bank. According to a report from the Asian Development Bank issued earlier last year, only 67% of Yangon – the commercial capital and most prosperous city in Myanmar – has electricity.

Still, for Green Elephant Restaurant’s owner Cherie Aung-Khin, the transaction is one of the most evident signs that her country is moving away from decades of isolation and exclusion. The restaurant – which opened in 2000, when foreign visitors were scarce – saw many quiet years when it first opened, a far cry from today which sees the two-story space packed with visitors, business people and foreign diplomats.

“Every day, we hear Myanmar is changing and modernizing, but today we can actually see it,” said Ms. Aung-Khin.

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Indonesia Real Time provides analysis and insight into the region, which includes Singapore, Thailand, Indonesia, Vietnam, Malaysia, the Philippines, Myanmar, Cambodia, Laos and Brunei. Contact the editors at SEAsia@wsj.com.

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